Believe it or not, Betaworks is snapping up social news aggregator Digg. The rumoured price? Just $500,000 dollars, says the Wall Street Journal. Personally, I don’t buy it because Google offered $200 million in 2008, so right now Digg looks like a bargain.

Digg will be soon integrated in Betaworks News.me mobile social media product, which will deliver the best stories shared on Facebook, Twitter and Digg. Right now, the News.me app is only available for the iPhone and the iPad.

Digg will immediately get a new CEO, Betaworks founder John Borthwick, who will replace Digg CEO Matt Williams. In a blog post, Williams says he plans to leave the company and become an entrepreneur-in-residence at venture firm Andreessen Horowitz, after the buyout is complete.

Digg founder Kevin Rose, who also joined Google a few months ago when Google acquired Milk, is now part of Google Ventures. When asked about the Betaworks Digg transaction, Kevin Rose told WSJ:

I’ve always been a fan of John’s product vision and the companies he builds, funds, and advises. John understands the real-time nature of the web and how to capture and surface trends as they occur. Given his experience with bit.ly, news.me, and Chartbeat I can’t wait to see what he does with Digg.

Betaworks claims it will turn Digg back into a start-up by integrating it inside News.me. It will be hard to make Digg popular once again, but at least this new deal gives Digg another chance to survive.

We are turning Digg back into a startup. Low budget, small team, fast cycles. How? We have spent the last 18 months building News.me as a mobile-first social news experience. The News.me team will take Digg back to its essence: the best place to find, read and share the stories the internet is talking about. Right now.